Producing its profit maximizing level of output

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Reference no: EM131169380

Suppose Marcy's Medical Machines operates in a perfectly competitive market and is producing its profit maximizing level of output. Suppose further that at this level of production, its average total cost is $2500, average variable cost is $2300, and marginal revenue is $2800.

1. In the situation above, Marcy's production of medical machines in the long run will be ______ it was i the short run, everything else held constant.

(greater than/less than/ same as)

2. Over time, in the above situation, the equilibrium price of medical machines will _______ everything else held constant. (increase/decrease/remain unchanged)

please explain how you got your answer.. mostly interested in how to solve the problem.

Reference no: EM131169380

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